FCVic has made a submission to the Tax Ombudsman’s review of the Australian Taxation Office’s (ATO) administration of Director Penalty Notices (DPNs). The submission recognises that DPNs are an important compliance tool, but notes that their consequences can be severe and, in some cases, irreversible. Drawing on the experiences of generalist and specialist small business financial counsellors, it argues that the ATO must distinguish deliberate non-compliance from circumstances involving financial distress, vulnerability, coercion, or a lack of information when a business is first set up. FCVic thanks the FCVic Small Business Network, especially the specialist small business financial counsellors at Each, for the insights and expertise that informed this submission. We also acknowledge and support the feedback provided to this review by our colleagues at Financial Counselling Australia.

The submission makes 27 recommendations covering communication, early intervention, vulnerability, and ATO capability. These include linking Director IDs to individual myGov or ATO accounts, clearer and trauma-informed DPN communications, an early-intervention framework that responds to signs of financial distress, and a specialist pathway for coerced and disputed directorships, with recovery action paused while concerns are assessed. FCVic also calls on the Australian Government to implement key recommendations from the Parliamentary Joint Committee’s financial abuse inquiry, and for the ATO to formally recognise financial counsellors as trusted intermediaries.